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On The RiskMap Radar: Iran's Nuclear Negotiations, Mexico's Reforms, And The 'Post-Crimea' Era Of Geopolitics

LONDON – Negotiators over Iran’s nuclear program agreed to a four-month extension to reach a deal after arriving at a July 20 with no agreement in sight. The extension reflects just how important the negotiations are to the parties involved. “Both sides who are negotiating here, but particularly the US and Iran, have a vested interest in this being successful,” says Henry Smith, Control Risks’ senior Mideast analyst, in a new podcast. “People want to see an agreement reached, and I think that’s why you are seeing efforts to find a workaround.”

Despite the absence of a deal, several signs give cause for optimism that the talks continue to be productive. One is that the negotiators have been quite tight-lipped; public information about the progress of the talks and the positions of the parties involved has been limited. Another is that the negotiators have managed to keep their discussions limited to just the nuclear file. Regional tensions abound—in Israel and Palestine, Syria, Iraq and elsewhere—but the negotiations have not strayed to these other topics. Smith says keeping the negotiations focused on just nuclear issues increases the chances of success.

In Mexico, last year’s historic reforms have given way to legislative sausage-making. In order for the reforms to proceed, Mexico’s Congress must pass secondary law that lay out the details of how each reform will proceed, what new regulations will help shape them, and which government agencies will be responsible. A breakthrough came earlier this month, when President Enrique Peña Nieto signed a new law that sets out the path for reforming Mexico’s telecommunications sector. While the telecoms reforms are substantial, Control Risks Mexico Analyst Dwight Dyer suggests they do not substantially enhance competition. Meanwhile, Mexico’s Senate is debating the details of the country’s much-watched energy reform, and a new law could emerge in the next few weeks.

Recent periods of geopolitics have been variously described as the “post–Cold War world,” the “post-9/11 world” and the “post-Lehman world.” But recent developments, particularly Russia’s annexation of Crimea in its conflict with Ukraine, suggest the curtain has gone up on a new act on the world stage: the post-Crimea world. The central conflict in this new epoch pitches liberal democracies with open markets against authoritarian governments with state-driven economies, which some observers worry could evolve into a second Cold War. Control Risks Managing Director Michael Moran suggests most of the risks of such a global division can be managed and the direst outcomes remain unlikely. Yet should divisions between global economic powers lead to a battle for the “hearts and minds” of emerging markets, the consequences for global businesses could be acute.

The RiskMap Podcast is a fortnightly look at global business risks in the coming weeks. You can subscribe to it here.

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